1) Adelfio, CORSIA has come a long way since its adoption in 2016, but many market participants still describe it as a work in progress. From ICE’s vantage point, what’s working well - and where do you think the mechanism still needs refinement?

CORSIA is moving in the right direction - just not as fast as expected. The system is reviewed every three years to assess progress toward carbon neutral growth (CNG) from 2020 and the latest Committee on Aviation Environmental Protection (CAEP) report expects emissions to fall 7–10% below 2019 levels by 2035. But with ICAO’s net-zero 2050 goal, CORSIA must evolve beyond CNG.

Phase 1 is the first real test for CORSIA but still two bottlenecks persist: 

1. The slow transposition of Standard and Recommended Practices (SARPs) into domestic law, which is improving but still patchy
2. The limited eligible supply hitting the market

The legal transposition of SARPs is essential to create enforceable demand. CAEP estimates offset demand between 950 and 1500 MtCO₂ across Phases 1 and 2, with 105–150 MtCO₂ for Phase 1 alone. On the supply side, while about 100–130 million tonnes of credits technically meet the CORSIA eligibility criteria, only one project (Guyana, under ART TREES) is currently fully eligible and authorized. Bottlenecks persist at the country level — mainly in the issuance of Letters of Authorization (LOAs) and confirmation of Corresponding Adjustments (CAs) through Biennial Transparency Reports (BTRs). There are also challenges at the standard level, particularly around the use of insurance to mitigate double claiming risks when CAs are not reflected in BTRs. Currently, only the Multilateral Investment Guarantee Agency (MIGA) is officially providing this insurance for Gold Standard (GS), but both Gold Standard and Verra have recently started the process of formal approval of additional private insurance companies.

2) With Phase I now well underway and the EU’s “Stop the Clock” measure still partially frozen, what signals are you seeing from airlines and regulators about how seriously CORSIA is being taken — particularly in jurisdictions with overlapping regional schemes like the EU ETS?

Governments are signaling growing seriousness about CORSIA while airlines are already preparing for compliance and launching Requests for Information (RFIs). Momentum seems to be picking up as regards the SARPs implementation with countries like Brazil, Canada, Japan, New Zealand, Kenya, and Sri Lanka fully transposing them, including penalties to address the first bottleneck we highlighted previously. The EU has implemented about 80% of its CORSIA package. What remains are a few key implementing acts — one of which will clarify how much the Corsia Eligible Emission Units (CEEU)s list will diverge from the ICAO list. Crucially, we’re also waiting to see what penalty level will be applied once the directive is fully transposed by Member States. If it matches the EU ETS penalty (as proposed in the UK) it would send a strong enforcement signal.

The main trigger for broader engagement will be to address the second bottleneck — increased eligible supply — and probably the first offsetting requirements reports, which airline will receive in November 2025.  We’ve seen some progress, especially from several African countries issuing Letters of Authorization (LOAs), but a faster pace is needed. Countries are setting up the Art6 reporting infrastructure and probably in the next round of BTR reports we could see more LOAs and CAs, which in turn would ease pressure on the insurances. 

3) Carbon markets can be intimidating — full of acronyms, vintage years and quality debates. What role do you see ICE playing in demystifying access to high-integrity offsets for aviation players?

ICE’s primary role as a regulated futures exchange and clearing house is to provide standardized products and transparency to price and transfer risk.  As the world’s largest platform for trading environmental derivatives, we give participants the tools they need to manage their exposure to price risks across the environmental market ecosystem — whether under cap and trade programs, energy attribute certificates or carbon crediting programs, like CORSIA.  Over $1 trillion of environmental assets have traded on ICE in each of the last four years.

Airlines already use our futures products to manage price risk for their aviation fuel (including SAF) requirements and their carbon price risk exposure for cap-and-trade programmes in UK and EU.  Airlines should think of carbon price hedging for CORSIA in a similar way.

We launched the world’s first physically delivered futures contract for CORSIA-eligible units — ICE CP1 — in October 2023 to be the best proxy for managing exposure to carbon price risk and to simplify CORSIA compliance by clearly defining the following:

• What the buyer receives (CORSIA-eligible emissions units)
• Where they come from (ICE-designated registries like ACR, Gold Standard, Verra, and ART TREES in the near future)
• When delivery occurs (at contract expiry)
• At what price — with all transactions centrally cleared to eliminate counterparty risk

In carbon, there can be a nuance between carbon allowance markets where each unit is 100% fungible - and where the futures market is also used to take delivery and retire the asset - compared to a carbon credit which may represent different atmospheric outcomes.  Airlines may take different approaches as to whether to use the futures contract to take delivery for retirement or not.  If that’s the case our auction service is designed for those participants who want specific projects and atmospheric outcomes.  We don’t see this differently to other market outcomes, where participants who have bespoke requirements transact outside of the exchange - normally the price risk ends up being managed through the exchange at some point.

With a track record of two decades operating the world’s largest environmental marketplace we also have a role to help demystify environmental markets through stakeholder engagement, events, and of course our “CORSIA Chronicles” podcast.

4) Airlines are understandably focused on cost and compliance — but are you seeing signs that CORSIA is becoming part of a broader sustainability strategy, or is it still viewed as a regulatory tick-box?

CORSIA is effectively a climate-club. It’s a financial mechanism for a whole sector to start paying for some of their emissions. By putting a price on carbon, it incentivizes lower-cost abatement opportunities, operational efficiency and renewable fuel adoption. 

How a single airline operator approaches CORSIA largely depends on where compliance sits within the organization. If it’s managed by Treasury or Finance, there’s a focus on cost effectiveness at a systems level. Sustainability teams may have more bespoke requirements and want to match investments more to where the organization operates. However, like most markets, a portfolio-based approach evolves as good practice for risk management: using a mix of units to meet compliance needs while aligning with brand values, passenger expectations and route-specific considerations. Also, as a hard to abate sector, some airlines are exploring deploying capital in carbon removals to provide the demand signal for an asset they may need to rely on in the long term.

5) Finally, let’s talk integrity. Much has been said about the quality of offsets approved under CORSIA. How do you see the market balancing scale, cost, and credibility — and what lessons might aviation offer to other sectors entering the voluntary or compliance offset space?

 In question 3 we talked in detail about the role of the Exchange in managing price and counterparty risk, but we also play a significand role for both quality and integrity.

But importantly they are not the same — although in the carbon credit market debate they are often used interchangeably. 
Integrity is adherence to rules, standards, and truth — regardless of intent or outcome. It’s not about how good something is (quality), but whether it operates transparently, consistently, and within the agreed framework.

Integrity in markets means the system behaves as it claims to —prices reflect real information, rules are enforced, and no one gets an unfair advantage. Transparent public regulated markets democratise price discovery, reduce adverse selection and reduce the risk of actors behaving inappropriately.  “Fair and orderly” is at the heart of regulated financial markets. 

Quality refers to the performance and environmental impact of a carbon credit, but it is subjective, and markets are excellent at translating subjective views into objective price signals.  The role of the market is also to allocate capital efficiently and to find the most cost-effective solutions - cheapest to deliver is a design feature not a bug.  

Importantly price and quality don’t always correlate; price also depends on supply and demand, but the beauty of the market is - if the price doesn’t reflect your view of value - then you can buy or sell it.  

As demand for CEEUs ramps up during Phase 1 and 2, and supply remains constrained, we expect the market to price “quality” into the curve. What’s considered “cheap” or “credible” today may shift as the market evolves and as new types of credits (e.g., removals) enter the system.

CORSIA is the first global compliance program for an entire sector built around the use of credits that meet both CORSIA Eligibility Criteria and have corresponding adjustments. This allows entities to use carbon units not just for compliance, but as a way to send signals to stakeholders - by supporting specific geographies, project types, or co-benefits. This unique selling point for the program, paired with oversight, is something other sectors - especially those exploring Article 6 units could learn from.

Billions of tons of carbon savings are needed to decarbonize and CORSIA and CP1 futures have the potential to be the proxy to manage exposure to carbon price risk and be catalytic in producing those carbon savings.